Commercial television industry financial trends 1978-79 to 2005-06

In the 20-year period from 1979-80, commercial television revenues outpaced the general Australian economy. However, since 2000 television revenue growth has slowed.In the 20-year period from 1979-80, commercial television revenues outpaced the general Australian economy. However, since 2000 television revenue growth has slowed, according to a report by the Australian Communications and Media Authority.

The Commercial Television Industry Financial Trends 1978-79 to 2005-06 report, released today provides a picture of the financial performance of the commercial television industry over a period when the competitive environment and regulatory regime changed substantially.

In the period 1979-80 to 1999-2000, commercial television revenues grew by 3.8 per cent compared with Gross Domestic Product (GDP) which grew by an average of 3.2 per cent in real terms.

Since 2000, alternatives to television, including the Internet, subscription television, DVDs and games, have gained in popularity, attracting both new audiences and advertisers. This has seen revenue growth for the commercial television industry slow to an annual average of 0.6 per cent and profitability decline since 1999-2000 (despite continued increases in expenditure).

In the 2005-06 financial year, the commercial television industry reported total revenues of $3,989.7 million, generating a profit (measured as profit before interest and tax (PBIT) of $620.4 million.

The study also found that industry PBIT increased between 1991-92 and 2003-04 at an average annual rate of 6.7 per cent. The exception to this trend was a period of unstable PBIT around 2000. Recently, over a two year period from 2004-05, PBIT has fallen by an average of 27.8 per cent per annum. The study found that these falls in PBIT were due to increases in expenditure in 2004-05 (in particular Australian program usage and amortisation and affiliation fees) and falls in revenue in 2005-06.

In addition to examining the profitability of the commercial television industry, the study also compares the performance of licensees in metropolitan markets with those in regional areas.